27% increase in license and transaction fee revenues ("recurring
revenues") to $6.9 million, representing 82% of total revenues for the
quarter;

174,000 total connections to its ePort Connect® service, a 35%
increase from 129,000 connections as of September 30, 2011, with
10,000 net new connections added in the first quarter of Fiscal 2013;

3,725 total customers, a 64% increase from 2,275, with 450 new
customers in the first quarter;

Adjusted EBITDA of $730,707, up from ($760,088);

GAAP net income of $39,140, up from ($78,954); and non-GAAP net loss
of ($95,993) from ($1,815,563) in the same quarter a year ago.

"Our first quarter results reflect steady progress toward our Fiscal
2013 goals set out in our year-end conference call in September,
particularly our goal for achieving non-GAAP net income in our second
fiscal quarter ending December 31, 2012," said Stephen P. Herbert,
Chairman and CEO of USA Technologies. "In addition, we were extremely
pleased to see Adjusted EBITDA of $730,707. After excluding $328,000 in
remaining expenses related to Fiscal 2012's proxy contest, our Adjusted
EBTIDA would have crossed the $1 million mark—a tremendous milestone for
USAT and we believe a strong indicator of the value inherent in our
ePort Connect service model as we continue to grow our base of recurring
revenues.

"Net new connections for the first quarter were generally in line with
our expectations, particularly in vending, although kiosk—related
connections played a smaller role than anticipated this quarter,"
continued Herbert. "At the same time, while steady progress continued in
expanding our ePort Connect network and recurring revenue base, the
first quarter was also marked by a number of important advancements with
respect to growing the value of every USAT connection longer-term,
particularly with respect to our mobile and diversification strategies,"
said Herbert.

Strategic highlights during the first quarter included:

A special marketing agreement with Isis—a
mobile payment and commerce system joint venture between AT&T,
T-Mobile and Verizon—that promotes cashless adoption in tandem with
Isis mobile wallet acceptance in Isis' two launch markets of Austin,
Texas, and Salt Lake City Utah;

Innovative mobile-based loyalty and couponing services demonstrated in
the Verizon booth at CTIA
MobileCON, including contextual applications (which provide a
customized rewards experience based on where the consumer is and what
they have purchased in the past), machine coupon redemption, and the
ability to push information, advertisements, machine location and
product availability to consumers via NFC smart phones;

Accelerated work with customers and partners with respect to the
introduction of ePort
Mobile™-- USAT's mobile acceptance product-- during the quarter,
with additional customer demonstrations scheduled for mid-November at
a NAMA trade event in New Orleans; and,

Introduction of QuickConnect™--an
API Web service that streamlines the process by which developers or
OEMs can point their devices to ePort Connect—to further expand USAT's
pipeline in the kiosk market.

First Quarter Results

Revenues for the first quarter of Fiscal 2013 were $8.4 million, an
increase of 25% from the same period a year ago. Revenue growth was
fueled by a 27% growth in license and transaction fees and a 15%
increase in equipment sales compared to the first quarter of Fiscal 2012.

Revenue from license and transaction fees, which is driven primarily by
monthly ePort Connect service fees, JumpStart fees and transaction
processing fees, grew to $6.9 million for the first quarter. As of
September 30, 2012, USAT's ePort Connect service base totaled 174,000
connections.

Gross profit was $3.1 million in the first quarter compared to $2.0
million for the same period in the prior year, a 53% increase. Increased
revenues and actions taken by management over the course of Fiscal 2012
to strengthen major supplier contracts and streamline network operations
contributed to the increase. Gross margin was 37.5% for the first
quarter compared to 30.6% for the same period a year ago, as stronger
gross margins on revenues from license and transaction fees, now 82% of
total revenues, contributed to a larger share of the overall mix.

Operating expenses of $3.6 million declined by $0.3 million in the first
quarter of Fiscal 2013 compared to the first quarter of Fiscal 2012. As
a result, operating margins improved to (4.9%) from (27.2%) a year ago
and on a non-GAAP basis, which excludes $328,000 in proxy expenses in
the Fiscal 2013 first quarter, non-GAAP operating margins improved to
(1.0%) compared to a non-GAAP operating margin of (27.2%) for the same
period a year ago—all while supporting double-digit top line growth.

GAAP net income for the first quarter of Fiscal 2013 was $39,140. On a
non-GAAP basis, which also excludes fair value of warrant liability
adjustments for both years in order to track the operational progress of
the business, non-GAAP net loss narrowed to ($95,993) from a non-GAAP
net loss of ($1.8) million for the first quarter of Fiscal 2012.
Continued, strong revenue growth and actions to enhance gross margins
and lower operating expenses led to this $1.9 million improvement (see
non-GAAP Reconciliation table).

After preferred dividends, net loss per common share was ($.01) for the
first quarter of Fiscal 2013 compared to ($.01) for the same period in
Fiscal 2012. On a non-GAAP basis, net loss per common share was ($.01)
for the first quarter of Fiscal 2013 compared to ($.07) for the same
period in Fiscal 2012.

Outlook

"Strategies that have delivered double-digit increases in our ePort
Connect service and customer base for the prior corresponding quarter
are building a reliable and high margin revenue stream that is
generating cash and taking us ever closer towards profitability,"
continued Herbert. "We are diligently working towards non-GAAP net
income in our second fiscal quarter, and outside of any unusual or
unanticipated non-operational expenses, expect to achieve that goal (see
Discussion of Non-GAAP Financial Measures).

"In addition, we remain on track to meet other Fiscal 2013 targets
established for the year," said Herbert. "We continue to work toward
60,000 new connections for the year, and for 224,000 in total
connections to our ePort Connect service by the end of our June 30, 2013
fiscal year. We also remain committed to achieving over 30% revenue
growth for the year, as well as cash generated from operations in the
$4-$5 million range.

"Perhaps more importantly, we believe these Fiscal 2013 targets
highlight the sustainable improvements in the business we were seeking
in our turnaround plan articulated to shareholders less than a year
ago," said Herbert. "They also highlight how every new connection to our
ePort Connect cashless and M2M telemetry service can further enhance
shareholder value through the continued cash generation characteristic
of a service business. With cashless adoption in the unattended retail
market at the early stages of adoption, we remain very optimistic about
the future," concluded Herbert.

Webcast and Conference Call

USA Technologies will conduct a conference call and webcast at 10:00
a.m. Eastern Time on November 8, 2012. USA Technologies invites all
interested parties to listen to the live webcast of the conference call,
accessible on the Investor
Relations section of USA Technologies' website. The webcast will be
archived on the website within two hours of the live call. It will
remain available for approximately 90 days. Interested parties unable to
access the webcast may also participate by calling (866) 393-1608 or, if
an international caller, (224) 357-2194. A replay of the call, available
until midnight on November 10, 2012, can be accessed by calling (855)
859-2056; Conference ID# 58774466, (toll free).

Forward-looking Statements:

"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: All statements other than statements of historical fact
included in this release, including without limitation the financial
position, achieving profitability or non-GAAP net income or positive
adjusted EBITDA, anticipated connections to our network, business
strategy and the plans and objectives of USAT's management for future
operations, are forward-looking statements. When used in this release,
words such as "anticipate", "believe", "estimate", "expect", "intend",
and similar expressions, as they relate to USAT or its management,
identify forward-looking statements. Such forward-looking statements are
based on the beliefs of USAT's management, as well as assumptions made
by and information currently available to USAT's management. Actual
results could differ materially from those contemplated by the
forward-looking statements as a result of certain factors, including but
not limited to, the ability of USAT to generate sufficient sales to
generate operating profits, or conduct operations at a profit; the
incurrence by us of any unanticipated or unusual non-operational
expenses, such as in connection with a proxy contest, which would
require us to divert our cash resources from achieving our business
plan; the ability of USAT to retain key customers from whom a
significant portion of its revenues is derived; whether USAT's customers
would continue to add additional connections to our network in the
future at levels currently anticipated by USAT; the ability of USAT to
compete with its competitors to obtain market share; whether USAT's
customers continue to utilize USAT's transaction processing and related
services, as our customer agreements are generally cancelable by the
customer on thirty to sixty days' notice; the ability of USAT to obtain
widespread commercial acceptance of it products; the ability of USAT to
raise funds in the future through the sales of securities in order to
sustain its operations if an unexpected or unusual non-operational event
would occur; whether the actions of our former CEO which resulted in his
separation from the Company or the Securities and Exchange Commission's
investigation would have a material adverse effect on the future
financial results or condition of the Company; and whether USAT's
existing or anticipated customers purchase, rent or utilize ePort
devices in the future at levels currently anticipated by USAT. Readers
are cautioned not to place undue reliance on these forward-looking
statements. Any forward-looking statement made by us in this release
speaks only as of the date of this release. Unless required by law, USAT
does not undertake to release publicly any revisions to these
forward-looking statements to reflect future events or circumstances or
to reflect the occurrence of unanticipated events.

USA Technologies, Inc.Consolidated Statement of
Operations

Three months endedSeptember 30,

2012

2011

(unaudited)

(unaudited)

Revenues:

License and transaction fees

$

6,906,356

$

5,419,663

Equipment sales

1,483,921

1,286,085

Total revenues

8,390,277

6,705,748

Cost of services

4,192,360

3,761,577

Cost of equipment

1,053,636

895,135

Gross profit

3,144,281

2,049,036

Operating expenses:

Selling, general and administrative

3,215,125

3,468,070

Depreciation and amortization

343,388

403,232

Total operating expenses

3,558,513

3,871,302

Operating loss

(414,232)

(1,822,266)

Other income (expense):

Interest income

20,166

17,867

Interest expense

(23,006)

(11,164)

Change in fair value of warrant liabilities

463,133

1,736,609

Total other income (expense), net

460,293

1,743,312

Income (loss) before provision for income taxes

46,061

(78,954)

Provision for income taxes

(6,921)

-

Net income (loss)

39,140

(78,954)

Cumulative preferred dividends

(332,226)

(332,226)

Loss applicable to common shares

$

(293,086)

$

(411,180)

Loss per common share (basic and diluted)

$

(0.01)

$

(0.01)

Weighted average number of common shares outstanding (basic and
diluted)

32,518,230

32,288,638

USA Technologies, Inc.Consolidated Balance Sheets

September 30,2012

June 30,2012

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

6,203,703

$

6,426,645

Accounts receivable, less allowance for uncollectible accounts of
$19,000 and

Adjustments to reconcile net income (loss) to net cash used in
operating activities:

Charges incurred in connection with the vesting and issuance

of common stock for employee and director compensation

125,333

240,453

Charges reduced for change in fair value of warrants

(463,133)

(1,736,609)

Depreciation, $676,218 and $418,493, respectively,

of which is allocated to cost of services

834,006

563,125

Amortization

185,600

258,600

Bad debt recoveries, net

(6,129)

(22,056)

Provision for deferred tax liability

6,921

-

Changes in operating assets and liabilities:

Accounts receivable

81,320

187,501

Finance receivables

30,831

(43,791)

Inventory

1,331,390

160,798

Prepaid expenses and other assets

79,629

48,339

Accounts payable

(115,452)

(656,552)

Accrued expenses

(1,451,446)

582,357

Net cash provided by (used in) operating activities

678,010

(496,789)

INVESTING ACTIVITIES:

Purchase of property and equipment

(1,525)

(60,348)

Purchase of property for rental program, net

(2,075,390)

(1,234,608)

Net cash used in investing activities

(2,076,915)

(1,294,956)

FINANCING ACTIVITIES:

Proceeds from the issuance of common stock

$

-

$

10,010

Proceeds from line of credit

1,337,779

-

Repayment of long-term debt

(161,816)

(109,839)

Net cash provided by (used in) financing activities

1,175,963

(99,829)

Net decrease in cash and cash equivalents

(222,942)

(1,891,574)

Cash and cash equivalents at beginning of year

6,426,645

12,991,511

Cash and cash equivalents at end of period

$

6,203,703

$

11,099,937

Supplemental disclosures of cash flow information:

Cash paid for interest

$

26,150

$

11,708

Equipment and software acquired under capital lease

$

-

$

495,955

Prepaid insurance financed with debt

$

128,062

$

90,372

Disposal of property and equipment

$

-

$

20,407

Reclass of rental program property to inventory

$

5,559

$

-

USA Technologies, Inc.

Non-GAAP Schedules

Discussion of Non-GAAP Financial Measures

This press release includes the following measures defined as non-GAAP
financial measures by the Securities and Exchange Commission: adjusted
EBITDA, non-GAAP net income (loss) , non-GAAP operating margin, and
non-GAAP net loss per common share. The presentation of these additional
financial measures are not intended to be considered in isolation from,
or superior to, or as a substitute for the financial measures prepared
and presented in accordance with GAAP (Generally Accepted Accounting
Principles), including the net income or net loss of USAT or net cash
used in operating activities. Management recognizes that non-GAAP
financial measures have limitations in that they do not reflect all of
the items associated with USAT's net income or net loss as determined in
accordance with GAAP. These non-GAAP financial measures are not required
by or defined under GAAP and may be materially different from the
non-GAAP financial measures used by other companies. USAT has provided
reconciliations of the non-GAAP financial measures to the most directly
comparable GAAP financial measures.

As used herein, non-GAAP net income (loss) represents GAAP net income
(loss) excluding costs relating to the proxy contest, the costs
associated with the separation of the former CEO, any adjustment for
fair value of warrant liabilities, and any charges for impairment of
intangible assets. As used herein, non-GAAP net loss per common share is
calculated by dividing non-GAAP net loss applicable to common shares by
the number of weighted average shares outstanding (basic and diluted).

Management believes that non-GAAP net income (loss) and non-GAAP net
loss per common share are important measures of USAT's business.
Management uses the aforementioned non-GAAP measures to monitor and
evaluate ongoing operating results and trends and to gain an
understanding of our comparative operating performance. We believe that
these non-GAAP financial measures serve as useful metrics for our
management and investors because they enable a better understanding of
the long-term performance of our core business and facilitate
comparisons of our operating results over multiple periods, and when
taken together with the corresponding GAAP financial measures and our
reconciliations, enhance investors' overall understanding of our current
and future financial performance.

As used herein, Adjusted EBITDA represents net income (loss) before
interest income, interest expense, income taxes, depreciation,
amortization, and change in fair value of warrant liabilities and
stock-based compensation expense and impairment expense on intangible
assets. We have excluded the non-operating item, change in fair value of
warrant liabilities, because it represents a non-cash charge that is not
related to USAT's operations. We have excluded the non-cash expenses,
stock-based compensation and impairment expense, as they do not reflect
the cash-based operations of USAT. Adjusted EBITDA is presented because
we believe it is useful to investors as a measure of comparative
operating performance and liquidity, and because it is less susceptible
to variances in actual performance resulting from depreciation and
amortization and non-cash charges for changes in fair value of warrant
liabilities and stock-based compensation expense.

As used herein, operating margin represents operating income or loss
divided by revenues and non-GAAP operating margin represents operating
income or loss excluding any expenses related to the proxy contest
divided by revenues.

Non GAAP ReconciliationReconciliation of Net Loss
to Non-GAAP Net Loss and Loss Per Common Share to Non-GAAP
Loss Per Common Share

Three Months Ended

9/30/2012

9/30/2011

Net income (loss)

$

39,140

$

(78,954

)

Non-GAAP adjustments:

Operating expenses

Selling, general and administrative

Proxy related costs

328,000

Fair value of warrant adjustment

(463,133

)

(1,736,609

)

Non-GAAP net loss

$

(95,993

)

$

(1,815,563

)

Net income (loss)

$

39,140

$

(78,954

)

Non-GAAP net loss

$

(95,993

)

$

(1,815,563

)

Cumulative preferred dividends

(332,226

)

(332,226

)

Loss applicable to common shares

$

(293,086

)

$

(411,180

)

Non-GAAP loss applicable to common shares

$

(428,219

)

$

(2,147,789

)

Weighted average number of common sharesoutstanding (basic
and diluted)